Correlation Between WesBanco and Blue Ridge
Can any of the company-specific risk be diversified away by investing in both WesBanco and Blue Ridge at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining WesBanco and Blue Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WesBanco and Blue Ridge Bankshares, you can compare the effects of market volatilities on WesBanco and Blue Ridge and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in WesBanco with a short position of Blue Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of WesBanco and Blue Ridge.
Diversification Opportunities for WesBanco and Blue Ridge
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WesBanco and Blue is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding WesBanco and Blue Ridge Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Ridge Bankshares and WesBanco is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on WesBanco are associated (or correlated) with Blue Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Ridge Bankshares has no effect on the direction of WesBanco i.e., WesBanco and Blue Ridge go up and down completely randomly.
Pair Corralation between WesBanco and Blue Ridge
Assuming the 90 days horizon WesBanco is expected to generate 0.33 times more return on investment than Blue Ridge. However, WesBanco is 3.04 times less risky than Blue Ridge. It trades about 0.03 of its potential returns per unit of risk. Blue Ridge Bankshares is currently generating about -0.04 per unit of risk. If you would invest 2,207 in WesBanco on August 25, 2024 and sell it today you would earn a total of 317.00 from holding WesBanco or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WesBanco vs. Blue Ridge Bankshares
Performance |
| Timeline |
| WesBanco |
| Blue Ridge Bankshares |
WesBanco and Blue Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WesBanco and Blue Ridge
The main advantage of trading using opposite WesBanco and Blue Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WesBanco position performs unexpectedly, Blue Ridge can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Blue Ridge will offset losses from the drop in Blue Ridge's long position.| WesBanco vs. Hafnia Limited | WesBanco vs. Mesa Air Group | WesBanco vs. Perseus Mining Limited | WesBanco vs. Ihuman Inc |
| Blue Ridge vs. LINKBANCORP | Blue Ridge vs. Colony Bankcorp | Blue Ridge vs. Bankwell Financial Group | Blue Ridge vs. ECB Bancorp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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